The Hindu Business Line : Polymers: The crude chain reaction

In 2005, the International Monetary Fund (IMF) had forecast a robust world economic growth compared to the last three decades, indicating good progress around the globe. Had crude oil prices been stable, this would have come to pass.

Barring short cool spells, oil prices have been on a high the last two years, and have had an impact on the economies of the developed and developing countries alike; its effect will be a 0.5 percentage point drop in world GDP.

The global demand for oil has been growing (faster than previously estimated) over the last three years. OPEC producers have cut back supplies (fearing the depletion of oil reserves), creating a large gap between demand and supply.

The current demand for oil is estimated at 82.2 million barrels a day against the estimated production of 75 million barrels a day. This has pushed the oil price to high levels, affecting especially the developing countries.

Oil prices continuing to remain at high levels is a cause of concern for all industries, especially petrochemicals, plastics, rubber and chemicals.

In a developing country such as India, petroleum and its by- and value-added products have wide-ranging applications and, thus, an impact on the overall growth. Plastics and rubber products are an essential part of the day-to-day life in this fast growing economy .

The growth rate of plastics, with a consumption level of 165 million tonnes in 2003, had outperformed world GDP growth rate. But in 2005 and 2006 this was affected due to high prices caused by a soaring crude oil.

Plastics, rubber and fibre industries may use just 5 per cent of the crude oil production, but find wide use in construction industry, healthcare products, packaging of food products, agriculture and water management, automotive industry (for improving fuel efficiency and reducuing pollution) besides replacement of some metals.

Advanced materials such as polymer-metal composites, alloys and blends focus on better properties and product design for longevity of use.

The packaging sector is the largest consumer of plastics at 65 million tonnes (40 per cent of the overall consumption), followed by the construction sector at 30 million tonnes. Packaging is an area that is expanding, but creating, at the same time, problems of waste disposal due to its ``use-and-throw nature'' compared to other applications of plastics. Polymer engineers are striving to effectively re-use plastic waste and design products of longer durability.

The Indian plastic industry has the advantage of taking a leaf from the West to come up with its own strategies to overcome the same.

Environmental concerns

To tackle the environmental problems associated with plastic disposal, manufacturers have to maintain quality in terms of choice of material, processing machinery, and additives.

The idea should be to produce high quality goods that can be used for longer duration, meaning a higher shelf-life or durability.

Packaging application is sure to definitely shift towards compostable plastics even as other methods to use the waste are found. Plastic use is expected to rise in automotive, electrical and electronics and building industries in the next five years. But a steep 30 per cent rise in raw material cost for plastic in the last two years is a matter of concern to the industry.

The ever-growing demand for plastics, fibres and petrochemicals can be sustained only with reasonable crude oil prices.

Need to conserve oil

In this effort, conservation will play an important role. It is a big challenge for technologists to conserve oil and its allied products, and the effort must involve all segments.

As petroleum and its products are primarily used for energy and transportation needs, energy audits and energy-saving devices and products should be encouraged and made mandatory for industrial and consumer sectors alike.

The polymer industry, whose products find extensive use in wind and solar energy applications, should support these alternative energy initiatives.

Besides, the use of plastics in the auto industry for weight reduction in vehicles is expected to reduce petroleum consumption substantially and save energy.

The application of polymers in engineering industries for reducing friction and energy consumption will continue for years to come.

Hence, engineering polymers and resins will have a good future in India.

(The author is Executive Director of Entech Polymer Consultants (P) Ltd. He can be reached at entechpolymers@sify.com)

More Stories on : Plastics | Petrochemicals

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page

Stories in this Section
At arm's length

Inflation: No great expectations

Inflation and growth dynamics

Lifting Bharat out of economic quagmire

Crop protection measures — Needed, a policy armour

Polymers: The crude chain reaction

Data crazy, not analysis savvy

In-house attack on social evils

Land market